The Economic Affairs Committee has launched an investigation into the UK’s energy policy.
It is inviting views on its inquiry titled ‘The Economics of UK Energy Policy’ as the committee believes the present mix of policy interventions and subsidies have led to failures in the energy market.
Some of the policy changes the government has announced during the last 12 months are the abolishment of subsidies for onshore wind, cut of support for solar and the elimination of energy efficiency schemes among others.
It aims to detect those failures and find measures to correct them.
It seeks answers to questions such as:
- What are the key economic challenges for the energy market which the government must address over the next decade?
- What are the emerging technologies which could materially change the energy market over the next decade and beyond?
- What preparations could be made to cope with the risk of a shortfall in energy supply? What would be the cost to the economy of the breakdown of the existing system?
- What alternate ways of pricing energy should be considered to reduce the burden of high energy bills, in particular on less well-off consumers?
Lord Hollick, Chairman of the Committee said: “In the Committee’s report into the economic impact on UK energy policy of shale gas and oil in May 2014, we concluded that there had been a lack of clarity and consistency in energy policy over many years. This failure of policy had left the UK dangerously close to lacking sufficient electricity generating capacity. Over two years later, little has changed. Coal power stations are being closed and old nuclear stations are coming towards the end of their life but it is not clear how they will replace and at what cost.
“The risk of widespread power cuts is low. The question is the price that taxpayers and consumers are going to have to pay to ensure that risk remains low. The energy market involves an extraordinarily complicated mix of policy interventions and subsidies. Every investment in electricity generating supply is effectively determined by the government. This inquiry will seek to investigate whether current policy is delivering the best deal for energy users and whether it is striking the correct balance between private and public sector involvement.”
Deadline for written submissions is the 30th of September.